Investing.com - Crude oil futures rallied sharply on Friday, with prices continuing to recover from recent lows amid speculation productions cuts by drillers in the U.S and global oil companies will alleviate a glut in supplies.
On the New York Mercantile Exchange, crude oil for delivery in March surged $1.57, or 3.07%, on Friday to end the week at $52.78 a barrel.
Industry research group Baker Hughes said Friday that the number of rigs drilling for oil in the U.S. fell by another 84 in the past week to 1,056, the lowest since August 2011.
The number of oil rigs has declined in 15 of the last 18 weeks since hitting an all-time high of 1,609 in mid-October.
A day earlier, Nymex oil soared $2.37, or 4.85%, to end at $51.21 a barrel, after Russian President Vladimir Putin confirmed that a cease fire deal with Ukraine starting February 15 had been reached, following months of violence.
For the week, New York-traded oil futures climbed 77 cents, or 2.11%, the third straight weekly gain.
New York-traded oil futures are up almost 15% over the past three weeks, however, prices are still down approximately 52% from a recent peak of $107.50 hit in June.
Elsewhere, on the ICE Futures Exchange in London, Brent for April delivery soared $2.24, or 3.78%, on Friday to settle at $61.52 a barrel by close of trade. Prices hit $61.77 earlier in the session, the most since December 23.
On Thursday, Brent surged $3.36, or 6.01%, to end at $59.28 a barrel.
The April Brent contract rallied $3.02, or 4.84%, on the week, also the third consecutive weekly advance.
London-traded Brent prices sky-rocketed 21.7% over the past three weeks. However, prices are still down approximately 47% since June, when futures climbed near $116.
The spread between the Brent and the WTI crude contracts stood at $8.74 a barrel by close of trade on Friday, compared to $6.99 in the preceding week.
Oil prices have fallen sharply in recent months as the Organization of Petroleum Exporting Countries resisted calls to cut output, while the U.S. pumped at the fastest pace in more than three decades, creating a glut in global supplies.
Oil received additional support from a broadly weaker U.S. dollar and as improving economic data from Europe boosted hopes for an increase in demand for crude.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped 0.06% to 94.24 late Friday to end the week down 0.5%.
Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
The drop in the dollar came after data on Friday showed that U.S. consumer sentiment unexpectedly deteriorated in February.
The preliminary reading of the University of Michigan’s consumer sentiment index fell to 93.6, down from January’s final reading of 98.1. Economists had forecast an unchanged figure.
The report came a day after data showing that U.S. retail sales unexpectedly fell 0.8% last month after dropping 0.9% in December, indicating that consumer spending remained sluggish at the start of the year.
The weak data prompted investors to trim back long positions in the greenback ahead of a three-day holiday weekend. U.S. markets will be closed on Monday in observance of Presidents' Day.
Meanwhile, data on Friday showed that Germany’s economy, the euro zone's largest, grew 0.7% in the fourth quarter, more than double the 0.3% forecast by economists.
A separate report showed that the euro zone's economy expanded by a larger-than-expected 0.3% in the three months to December.
In the coming week, investors will be focusing on Wednesday’s minutes of the latest Federal Reserve meeting for further indications on when the central bank may start to hike interest rates.
Fresh Greek debt talks on Monday will also be in focus after discussions on a new debt deal last week ended without an agreement.
Greece’s current €240 billion bailout is due to expire on February 28 and the new Greek government does not want it extended, fuelling fears over a conflict with its creditors which could trigger the country’s exit from the euro zone.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, February 16
Officials from Greece and the European Union were due to hold fresh talks in Brussels to discuss a solution to Greece's bailout program.
Markets in the U.S. are to remain closed for the Presidents Day holiday.
Tuesday, February 17
In the euro zone, the ZEW Institute is to report on German economic sentiment.
The U.S. is to release data on manufacturing activity in New York State as well as a private sector survey of home builders.
Wednesday, February 18
Markets in China are to remain closed for a national holiday.
The U.S. is to release a string of economic reports, including data on producer prices, housing starts, building permits and industrial production. Later in the day, the Federal Reserve is to publish the minutes of its January meeting.
Thursday, February 19
Markets in China are to remain closed for a national holiday.
The European Central Bank is to publish the minutes of its January meeting.
The U.S. is to publish a report on manufacturing activity in the Philadelphia region and the weekly government figures on initial jobless claims.
The U.S. is also scheduled to produce weekly oil supply data. The report comes out one day later than usual due to Monday's holiday.
Friday, February 20
Markets in China are to remain closed for a national holiday.
The euro zone is to publish preliminary data on private sector activity, while Germany and France are to also to publish data on private sector growth.
The U.S. is to round up the week with preliminary data on manufacturing activity.